Parks Points

A number of market developments and trends are impacting the residential security industry and many new solutions were debuted at CES. Traditional security providers are facing increased competition from point solutions such as the all-in-one camera.

While the emergence of smart home products extends the value of a security system, it also increases competition, as smart devices are often sold independently of a traditional security system. Many of these solutions are self-installable, meaning consumers increasingly will become accustomed to self-installing systems.

The rise of new DIY offerings in the past year alone illustrates the push to address this market. A steady growth trend towards self-installed systems is being experienced. Self-installed systems have slowly been taking a larger share of the overall security systems market. They remain, however, in the minority.

Nearly three-fourths of the overall market is still untapped (households with no security systems active). Furthermore, roughly 80% of broadband households do not have professional monitoring. This serves as a huge opportunity for disruption.

To push the needle beyond current adoption, newcomers are entering the market with alternative approaches and current incumbents are adapting their offerings to expand their current consumer pool.

Market expansion efforts follow three general approaches — expanding opportunities from the top tier of the market through feature rich and high utility products, the middle through alternative business model offerings, and the bottom through low price offerings with fewer functionalities.

Efforts to expand the market at the top tier include adding additional value and incremental dollars to the affixed RMR associated with professional monitoring in the form of interactive services and home controls.

Expansion from the middle tier of the market targets the “wavering core”, consumers who care for peace of mind, but are not entirely receptive to the traditional security offering. This segment is captured through alternative business models that provide options outside the classic pro-install, long-term contract model.

These alternative approaches include ad-hoc monitoring, self-install, and no-contract solutions. Luring the bottom tier of the market are solutions that appeal to price-sensitive consumers.

Security is increasingly becoming more affordable, accessible, and user friendly.

Last month at CES, a plethora of companies came together to showcase their latest and greatest products. DIY home security solutions were on display, aiming to give consumers the option for a low-cost solution:

• SkyLink: SKYLINKNET alarm systems are self-monitored and are priced as low as $100. No professional monitoring option is currently offered but may be down the line. The systems are compatible with Amazon Alexa, Google Assistant and IFTT.
• Ooma: A company that has been in the industry for years due to its VoIP services, recently launched a DIY home security system that leverages its communication technology. At CES, Ooma announced an expansion of its security systems with new hardware — a camera and smoke detector — and new features such as a siren and geofencing-enabled arming/disarming. The starter kit home security system is offered at $130 with the ability to remotely call 911.
• SimpliSafe: The well-known name in DIY security has a new sleek design thanks to its partnership with IDEO. The new model brings improvements in enabling WiFi and cellular connection, backup battery and a speedier processor. New hardware additions include a new video doorbell, smart lock and outdoor camera. Amazon’s Alexa will also be supported across its product line.
• Ring: Ring announced a new range of connected outdoor lights and security cameras, its upcoming DIY home security solution with optional pro-monitoring for $10 per month will be available in the spring.
• ADT: ADT showcased its SmartThings DIY security offering currently available through retail. It also launched a new video doorbell for its Pulse line. ADT already integrates with Alexa and will integrate Google Assistant in the next few months.

Point solutions that act as both complimentary and competitively with security systems, such as cameras, locks and lights, are enhancing with features such as voice, AI and video/audio analytics. In addition, smart home devices are becoming renter-friendly. Products that fall under this category and were featured at CES include:

• Toucan: Lighting fixtures that double as a security camera, its solution can be enabled with object recognition on the premium plan to discern between an individual and a car.
• igloohome: The company showcased its access control solutions and new products such as its mortise smart lock and deadbolt smart lock. Pin codes and Bluetooth keys can be customized and accessible for a certain amount of time. A current partnership with Airbnb allows easy and automatic generation of codes for renters.
• Remo+: Its Doorcam, a wireless camera that can hang from the top of the door, is particularly convenient for renters. Given its form factor, a consumer can easily place the device over the door without drilling any pieces of the equipment. Features include notifications based on motion, the ability to act as an intercom to speak to visitors without opening the door, 30-day cloud storage, and 720p resolution.
• Guardzilla: The Guardzilla 360 HD security camera is the first camera with a live 360-degree view. Paired with a smartphone, live streaming can be rotated or swiped to look around the room. Guardzilla has a professional monitoring option using their own central station, which costs $9.99 per month.

Market Evolution

The residential security landscape and its offerings are changing in many ways. Defining a traditional security system is becoming increasingly challenging — market entrants and new offerings are continuing to challenge what “traditional security” is. However, the core value proposition of providing peace of mind, safety and security still remains.

Dealers have the opportunity to leverage innovation coming from product manufacturers, but this requires the industry to expand beyond the architecture and supplier base for security control panels.

Directly connecting smart products to central monitoring services, for example, presents an opportunity to expand the market by addressing the needs of those not served by the professionally monitored security channel. New alternative business models are necessary to push the security industry forward overall and will have a profound impact on the opportunity for market expansion.

This article was published on Security Sales & Integration.